NZ's SkyCity cuts annual profit outlook as economic woes, higher costs bite (updated)

Skycity Entertainment

05/06/2024 22:27

(Adds details on forecast, background on firm throughout)
       June 6 (Reuters) - New Zealand's SkyCity Entertainment
 SKC.NZ  cut its annual profit forecast and suspended dividends
until fiscal 2026 on Thursday due to tough operating conditions
amid a potential uptick in costs from project delays and casino
duties. 
    The forecast cut comes amid multiple regulatory probes and
fines the firm is facing in New Zealand and Australia and an
overall weak period for casinos, which have seen a drop in
consumer spending due to sticky inflation.
    SkyCity slashed its net profit after tax forecast for the
year to between NZ$120 million ($74.28 million) and NZ$125
million from NZ$125 million and NZ$135 million projected
earlier. 
    The firm said the weakness, coupled with higher costs from
delayed projects and the possibility of a higher casino duty
expense in Adelaide, will likely continue into fiscal 2025. 
    The company also said it would suspend dividends for the
second half of this year and the whole of next year. 
    Additionally, SkyCity cut its annual earnings before
interest, taxes, depreciation and amortization (EBITDA) forecast
to a range of NZ$280 million to NZ$285 million, down from NZ$290
million to NZ$310 million it expected earlier.
        Its EBITDA forecast for fiscal 2025 is also lower at
between NZ$250 million and NZ$270 million, the company added. 
  
        The Auckland-based firm will pay a penalty of A$67
million in July to resolve anti-money laundering proceedings
brought against it by the 
    Australian
     financial crimes regulator after investigations found
systemic failures in its approach to anti-money laundering and
counter-terrorism financing laws.
  
    
     

($1 = 1.6155 New Zealand dollars)

 (Reporting by Prerna Bedi in Bengaluru; Editing by Alan Barona)
 ((Prerna.Bedi@thomsonreuters.com; +91 98052 24616;))